Filing and paying employer's contributions ‒ detailed guidance, 2018

You must file your reports on employer contributions electronically, in MyTax, for example. Paper forms can only be used if you do not have access to e-filing.

Table of contents

Businesses and other employers that must file employer's contributions (payroll withholding, health insurance, tax at source)
How to pay self-assessed tax return
Shared information content for filing self-assessed taxes
Employer's contributions
Payroll is seasonal, no wage payments for a time
Making corrections to submitted returns
The Tax Administration imposes late-filing penalties for overdue returns

Businesses and other employers that must file employer's contributions (payroll withholding, health insurance, tax at source)

Payroll withholding, the employer's health insurance contribution, and taxes at source are regarded as “employer contributions”. The reporting requirement for 2018 and prior years concerns businesses, companies, and others that fall into the following categories:

  • Employers paying wages on a regular basis
  • Casual employers
  • Payors of pension
  • Shipping companies paying wages treated as seafarer's income
  • Sub-accounting units (because large employers with several business locations may have a number of sub-accounting units entered in the Tax Administration’s registers)

How to pay self-assessed taxes

Read more about filing and paying self-assessed taxes 

Detailed instructions

Shared information content for filing self-assessed taxes

Taxpayer’s name

Registered business or association: fill in the name entered in the Trade Register or the Register of Associations.
Other taxpayers: fill in the full name.

Business ID or personal identity code

This entry is required. Fill in your personal identity code only in case you have no Business ID. This code is needed for matching the submitted information with the taxpayer concerned.

Date and signature

Returns must be dated and signed. In e-filing, electronic identification replaces the signature.

Telephone

Fill in the telephone number of a contact person giving additional information if necessary.

Tax period

Indicate the reported tax period by its number:

  • If your filing period is the calendar month, enter a number (1-12). Example: For filing taxes for March, enter '3'.
  • If your filing period is the quarter, enter 1, 2, 3 or 4. Example: For filing taxes for the 2nd quarter, enter '2' (from April to end of June).
  • If your period is the year, leave this field blank.

Year

Indicate the year of the tax period, fill in all the four digits.

Employer's contributions

Wages and other payments subject to withholding

Enter the following payments subject to withholding, made to beneficiaries during the tax period:

  • Wages, fees, salaries, social benefits, reimbursement paid to an individual in an employer/employee relationship (§ 13, act on tax prepayments (Ennakkoperintälaki 1118/1996))
  • Fees for attending a conference, for giving lectures or speeches, for being a member of a board of directors or other similar councils, for work as a Managing Director, amounts paid to a partner of a partnership company, and amts paid in compensation for acting in a position of trust (luottamustoimi in Finnish, förtroendeuppdrag in Swedish) (§ 13, act on tax prepayments).
  • Seafarer’s income
  • Pensions, social benefits, insurance indemnity payments, etc. (this also includes pensions paid to nonresident individual taxpayers)
  • Nonwage compensation (=trade income), royalties (§ 25, act on prepayments)
  • Wages and fees paid to a sportsman, payments from a special fund

Enter all the payments listed above regardless of whether the employer's health insurance contribution is being paid on them or not.

  • If all payments under "Wages and other compensation subject to withholding" are exempted from the contribution, enter zeroes in the "Wages subject to the employer's health insurance contribution" and "Health insurance contribution payable".

This field also intended for reporting any wages subject to withholding that an employer has paid to a nonresident beneficiary, and the wages (and other payments) must be reported annually on Form 7809e, the annual information return on payments made to nonresidents; use Codes AR, R2, R5, R6, RM and RE.

Annual information return on payments to nonresidents (7809e)

Enter the wages even in the following cases where no withholding is carried out because:

  • The paid-out wages are low
  • No cash payment – fringe benefits are provided instead
  • The beneficiary’s tax card indicates a zero rate of withholding.

If you are a household employer and haven't paid out more wages than €1,500 per calendar year and no withholding has been involved, you do not have to file a Self-Assessed Tax Return. However, if there has been any withholding, you must report it. When the wages paid out are above €200, you must file an employer payroll report (annual information).

Amounts treated as wages

For tax purposes, the following compensation is treated as wages:

  • Amounts reflecting the taxable values of fringe benefits, such as company car, accommodation, meals, and other non-cash benefits.
  • Any amounts higher than the tax-exempt limits of allowances for travel expenses – if the employer has paid out higher amounts than defined in the Official Decision of the Finnish Tax Administration on allowances for travel, the amount exceeding the limit is regarded as taxable wages. 
    See conditions of tax-exempt allowance (The 2018 Official Decision on Allowances for Travel Expenses)
  • Wages paid to employees during sick leave, even if compensation from Kela or an insurance company has been received for them.
  • Tips received by employees during their employment.
  • Employer-paid pension insurance premiums regarded as wages.
  • Additional daily sick-leave allowances financed by a sick-leave fund.
  • Annual wage equivalent for purposes of social insurance (=”vakuutuspalkka”) when applying the 6-month rule. If no such equivalent has been agreed on, fill in the actual cash wages.
  • Benefits arising from employee stock options or employee loans.
  • Fees paid for giving lectures, not based on an employer/employee relationship, fees for attending meetings, fees for giving lectures and speeches, fees for membership in a board of directors, regardless of whether pension insurance premiums are paid or not.
  • Severance pay in connection with termination of employment, other comparable indemnity amounts.
  • Amounts reflecting profit sharing, within the meaning of the act governing employee-stockholders' funds (henkilöstörahastolaki 814/1989), paid to employees in cash.

Compensation not treated as wages

  • Paid allowance for travel expenses that are treated as exempt from taxation if they were paid to the wage earner in accordance with the Decision of the Tax Administration on tax-exempt allowances for business travel.
  • Paid reimbursement of out-of-pocket expenses if they were paid to the wage earner in such a way that no obligation for withholding arises (such as reimbursement for private telephone and tools).
  • Arrangements and paid expenses for fringe benefits, if you provided them collectively to everyone who works for you (§ 67 and § 69, act on income taxation).
  • Wage earner-paid expenses that are directly connected to their work (such as their tax-deductible expenses for the use of a private chainsaw) and are accounted for before you withheld tax on their wages.
  • Paid expense allowance, treated as exempt from taxation, paid to a foster care provider.

Trade income and copyright royalty income

You must withhold tax on any payments going to a natural person or to a partnership (including limited and general partnerships) that are not on the Prepayment Register. Use this field to fill in this kind of trade income and copyright royalty income you have paid. Enter the gross amounts without deducting any VAT or paid reimbursement for the beneficiaries’ commuting/travel expenses.

In the same way, you must withhold tax on the amounts you pay to a limited company, cooperative or other corporate entity as trade income or royalties unless the beneficiary is on the Prepayment Register.
If you file on paper, fill in the taxes you withheld under “Information on other self-assessed taxes”. To identify the tax, enter code 25.

If you paid out dividends, you must not include them in “Wages and other payments subject to withholding”. The only field where you should report the tax you have withheld on paid-out dividends is “Other self-assessed taxes”, using code 92.

For more information, see Filing and paying other self-assessed taxes.

Tax withheld (on wages and other payments)

Enter the amounts you have withheld on:

  • Wages and salaries when paying them out.
  • Trade income i.e. nonwage compensation or royalties (compensation for use); if paid to physical persons, general partnerships, limited partnerships or other consortia.
  • Pensions (including pensions paid to non-resident taxpayers), annuities, social benefits strike allowances etc. when paid out.
  • Wages or fees paid to athletes, including the withholding on payments taken from a special fund, paid to nonresident beneficiaries, and also reported in "Wages and other payments subject to withholding".

Note: if you file on paper, enter any withholding on payments of dividends in 'Other self-assessed taxes', using code 92.

Read more: More information on withholding (only in Finnish, Ennakonpidätyksen toimittaminen)

Wages and other payments subject to tax at source

Enter the total of wages and other payments subject to tax at source paid to nonresident taxpayers during the tax period. Enter the gross amount, do not deduct the amount referred to in section 6 of the act on the taxation of non-residents’ income and capital.

Examples:

  • Wages subject to tax at source (for more information, see allowances for paid expenses).
  • Wages paid by a public corporate body.
  • Compensation paid to a public entertainer, artiste or athlete for personal services performed (taxable at the 15%-rate, or if a tax card has been issued – at a lower rate as appropriate).
  • Wages paid by foreign subsidiaries (or similar associated entities) to a nonresident employee working in another country, if the employee has Finnish social insurance coverage.
  • The benefit that arises from employee stock options and stock grants, if based on work performed in Finland.
  • Nonwage compensation, i.e. "trade income" (if paid to a corporate entity, it does not have to be reported unless you withheld tax at source on it).
  • Payments subject to withholding, made to nonresidents, when these payments are not reported in "Wages and other payments subject to withholding".

In addition, the wages or salary (€5,800 or higher) paid to key employees (to Finnish tax residents, too) (For more information, see the act on tax withholding on the compensation paid to foreign beneficiaries (only in Finnish, laki ulkomailta tulevan palkansaajan lähdeverosta 1551/1995).

  • If a Finnish company pays wages to a nonresident who works in a foreign country, and who is not covered by social insurance in Finland, do not report it on the return. However, the Finnish company (=you) must file an employer payroll report in the usual way.

Who is a nonresident taxpayer?

The following are non-residents:

  • A foreign citizen staying in Finland for no longer than six months.
  • A Finnish citizen who lives in a foreign country may become a nonresident after three full calendar years after the year of leaving Finland, or when he or she no longer has any substantial ties with Finland.

Payments of coverage for out-of-pocket expenses to nonresidents

If an individual's primary place of work is in a foreign country, and this individual is staying in Finland temporarily (e.g. lecturers and specialists), paid wages subject to tax at source do not have to include their allowances or reimbursement for travel, exempt from income tax under the act on income taxation, and in the case of seafarers, the tax-exempt allowance paid to seafarers. For more information, see the list under the sub-heading “Compensation not treated as wages”.

You must valuate the fringe benefits included in the wages you pay as instructed by the provisions of the act on income taxation.

However, if an individual who is a nonresident works in Finland full time, in a retail store, office, or a factory etc., this place becomes his or her primary place of work. In this case, you can pay no tax-exempt reimbursement to him or her.

If during the period, you only paid amounts subject to withholding of tax at source and nothing subject to ordinary withholding of taxes and contributions, you must enter zeroes in:

  • “Wages and other payments subject to withholding”, and
  • the health-insurance-contribution-related fields “Wages subject to employer's health insurance contributions” and “Employer's health insurance contribution payable”. 

Tax at source on wages, etc.

Enter the following amounts:

  • The tax-at-source, withheld on wages and nonwage compensation i.e. trade income, including amounts withheld on any payments of trade income to a foreign corporate entity.
  • The health insurance contributions of the insured person (health insurance contribution and daily allowance contribution).
  • The tax-at-source withheld on fees or wages paid to a public entertainer, artiste or athlete for the performance of personal services.
  • The tax-at-source withheld from key-employee salary.

Also, enter any taxes withheld on payments, subject to withholding, made to nonresidents and entered in "Wages and other payments subject to tax at source".

To calculate the tax at source, the basis is the gross amount minus deductions, pursuant to section 6 of the act on the taxation of nonresidents' income, (€510 per month or €17 per day).

If you file on paper, the tax-at-source you withheld on payments of interest and royalties requires reporting under code 69 in “Other self-assessed taxes”. Likewise, the tax-at-source on any dividends you pay requires reporting under code 39; on interest, under code 84.

Read more: Filing and paying other self-assessed taxes.

Wages subject to the employer's health insurance contribution

Enter the wages and other payments you paid out during the tax period and on which you must pay health insurance, including:

  • The wages, salaries, fees and compensation listed in § 13, Prepayment Act; excluding those referred to in the Act governing health insurance – see the list under the sub-heading Compensation not treated as wages.
  • Additional sickness allowance paid by a sickness insurance fund within the meaning of the act governing insurance offices.
  • Tip income, received by employees during their employment.
  • The basis wages for insurance premiums for an employee working in a foreign country if the six-month rule is applied, or instead of the wages for insurance purposes, the wages subject to withholding, paid to such an employee, if no agreement on a basis for insurance premiums is made.
  • Wages paid to a nonresident who is covered by the Finnish social security system (see “Wages and other payments subject to tax at source”).
  • The monthly pay of a key employee amounting to at least €5,800 (for more information, see the act on tax withholding on the compensation paid to foreign beneficiaries (only in Finnish, laki ulkomailta tulevan palkansaajan lähdeverosta 1551/1995)).
  • Compensation paid to a nonresident artiste for their personal endeavour
  • Seafarer’s income
  • Amounts paid as “pay security – palkkaturva"
  • Payments transferred to a special sportsmen's fund

Enter the wages even if no withholding is carried out. Reasons for no withholding include the following: the amount of pay is low, the pay is only given to the worker in the form of fringe benefits, the worker’s tax card specifies a zero rate of withholding. Employer's health contribution must also be paid in circumstances where no withholding is carried out.

Amounts for which the health insurance contribution is payable:

For tax purposes, the following compensation is treated as wages, and you must include it:

  • Amounts reflecting the taxable values of fringe benefits, such as company car, accommodation, meals, and other non-cash benefits.
  • Any amounts higher than the tax-exempt upper limits of allowances for travel expenses (if you paid out higher amounts than defined in the Tax Administration’s Decision on tax-exempt allowances for business travel or paid out the allowance amounts on less strict grounds, the part of the amounts considered subject to tax must be entered as wages paid to the worker).
  • Wages paid to workers during sick leave, even if you had received compensation from Kela or an insurance company for them.
  • Tip income, received by employees during their employment.
  • Employer-paid pension insurance premiums, regarded as wages.

Payments exempted from the health insurance contribution

If the wages and other payments do not give rise to the contribution, enter zeroes in “Wages subject to the employer's health insurance contribution” and “Employer's health insurance contribution payable”.

Amounts for which a health insurance contribution is not payable:

  • Wages you paid to workers younger than 16 or to workers who had turned 68. The calendar month of the sixteenth birthday is the last month when these wages are not included, and correspondingly, the calendar month of the 68th birthday is the last month when they are included.
  • Amounts listed in Act on Sickness Insurance Chapter 11, Section 2.4 including collective employer-provided fringe benefits given to the all the workers on your payroll, even if this benefit were taxable as a fringe benefit.
  • Benefits arising from employee stock options or employee loans.
  • Benefits arising from other rights to buy stock or similar securities for a reduced price on the basis of employment.
  • Wages payable for waiting time (§ 14.1, Employment Act).
  • Severance pay in connection with termination of employment, other comparable indemnity amounts.
  • Fees paid for giving lectures, not based on employer /employee relationships, fees for attending meetings, fees for giving lectures and speeches, fees for membership in the board of directors, if the law governing pension insurance does not prescribe that pension premiums are payable in the case.
  • Amounts reflecting profit sharing, within the meaning of the act governing employee-stockholders' funds (814/1989), paid to employees in cash.
  • Amounts excluded from your worker's wages before you carry out payroll withholding (e.g. exclusion for chain-saw costs), thus not subject to withholding.
  • Paid allowances for travel expenses that are treated as exempt from taxation because you paid them to worker within the max. limits set out by the Decision of the Tax Administration on tax-exempt allowances for business travel.
  • Wages paid by a substitute payer.

Nonresident workers who are covered by Finnish social insurance

The employer must pay the health insurance contribution and collect the insured party’s health insurance premium from the worker. A nonresident is covered by the Finnish social insurance system if he or she works on board a Finnish ship, or arrives in Finland to work for at least four months, and is not a holder of the A1 Certificate or similar documents issued by home-country social authorities.

The employer does not have to pay the contribution and the insured party’s health insurance if the sum of wages paid to the nonresident does not reach €1,173 per month (year 2017) or if the working hours are below 18 hours a week. For checking the 2018 values, you can click “How to calculate the health insurance contribution” (only in Finnish, Työnantajan sairausvakuutusmaksun ja vakuutetun sairausvakuutusmaksun määräytyminen ja verotus.

Even if the employee's place of work is not located in Finland, coverage by the Finnish social insurance system may exist on the basis of the following:

  • The employee belongs to the aircrew of a Finnish airline company.
  • The employee lives in the EEA or Switzerland and is employed by a Finnish freight company and is a member of the freight fleet crew or personnel.

For more information (in Finnish/Swedish), click Työnantajan sairausvakuutusmaksun ja vakuutetun sairausvakuutusmaksun määräytyminen ja verotus.

Health insurance contribution payable

The employer's health insurance contribution, net of adjustments.

  • The base for this contribution is the payroll total entered in the previous field. Multiply the total by the percentage rate. 
    Rates in force for 2018 (Employer's contributions to be reported and paid to the Tax Administration)
  • If Kela or an insurance company has paid you reimbursement for maternity allowance or similar daily allowances for people on leave, you must adjust the contribution. To work out the adjustment amount, multiply the allowance by the rate of the contribution that you had used in the tax period when you paid the wages.

Submitting an excessive amount

Employers are entitled to compensation from Kela if they have paid wages but the worker receives Kela-paid daily allowance. In this case, the Tax Administration can pay back the health insurance contributions to you if you received the compensation described above. If you reported a contribution amount that turns out to be too high because of the compensation, you must correct it by filing a replacement return for the same tax period.

File your replacement return for the tax period where the error was found. If the amount is low, you can implement the simplified method of making corrections. Another option to make a correction to a paid-in health insurance contribution is as follows: Subtract the excessive amount from the next health insurance contribution you are expected to pay during the calendar year.

Employers can do this independently after they have received the letter confirming the exact amount of a social benefit, of a compensation, etc. Refunds of health insurance contributions are paid to employers in connection with a coverage being paid to them by Kela, because their employees have received per diems, pensions and other benefits. For example, if an employer has paid wages to a worker who is on maternity leave, they can wait until Kela sends them a letter confirming the amount of the maternity benefit and then subtract the excessive part of the paid-in health insurance contributions accordingly.

Illustration: The employer received money in February 2018 as a coverage for their payments of wages in May 2017, for which the worker was paid social allowances. Under the circumstances, the employer had paid too much in health insurance contributions. The employer can now file a replacement return for May 2017 with a complete set of employer's contribution amounts. The employer payroll report filed for 2017 must be corrected, too.

Errors in reporting the employer's health insurance contributions

If you made an error in your filing, you must put it right. For more information, see Making corrections to submitted returns An example of an error on the tax return would be that you have entered €70.00 instead of €700.00 in the health insurance contribution field.

Section 9 of the act on health insurance contributions

Section 25 of the act on assessment procedure for self-assessed taxes (Laki oma-aloitteisten verojen verotusmenettelystä 768/2016)

Payroll is seasonal, no wage payments for a time

If you are registered as an employer paying wages regularly, you must submit Self-assessed tax returns for each tax period.

If you paid no wages during a tax period and you file on paper, enter zeroes in the following fields of the paper form: “Amount withheld”, “Tax at source on wages, etc.” and “The employer's health insurance contribution”.

If you file in MyTax, you must submit your “Not active” report specifically for each tax period. The way to do this in MyTax is to select “No Activity/wage payments” specifically for each tax period.

You do not have to submit a return for reported interruption periods unless you have paid wages.

If your company no longer pays wages or has gone out of business, you should file a Notification on termination of business (available at www.ytj.fi). However, you must file your return for employer's contributions for the final tax period when you still are registered as an employer paying wages regularly.

Special groups of taxpayers

Accounting units

Large employers with several business locations may have a number of sub-accounting units entered in the Tax Administration’s registers. These units must use their own Identity Codes when filing their tax returns for employer's contributions. However, their VAT and other self-assessed taxes are reported with the main-company Business ID codes only. The Tax Administration only uses the main-company account when entering the payments reported by sub-accounting units.

Shipping company paying wages treated as seafarer's income

There is no requirement to file a return for seafarer's wages or fees. Instead, similarly as for other payrolls, you must file and pay the withholding, taxes at source, and employer's health insurance contributions by the 12th of the second month after the end of the calendar month. Returns must be filed electronically, in MyTax, or via other e-Services. MyTax also has an interface allowing users to make payments.

Tax period

Indicate the reported tax period by its number:

The tax period is usually the month. You can only file by the quarter if the Tax Administration has granted you an extended tax period.

  • If your tax period is the month, enter a number (1–12). Example: For filing taxes for March, enter '3'.
  • If your filing period is the quarter, enter 1, 2, 3 or 4. Example: For filing taxes for the 2nd quarter, enter '2' (from April to end of June).

Note: You must always apply the monthly tax period on the filing of insurance-premium and lottery taxes.

Year

Indicate the year of the tax period, fill in all the four digits.

Tax payable

Enter the amount due for the tax period.

Making corrections to submitted returns

If you detect an error or omission, you are expected to put it right without delay. It is expected that any inaccuracies are corrected, although no change would ensue to amounts of taxes.

The way to make corrections is by filing a replacement return for the tax period where the error occurred.

The making of corrections is the same, regardless of the fact that some corrections lead to an increase of the amount of tax, and others lead to a decrease. In other words, from the perspective of making corrections, it is not important whether your original return contained too much tax to pay – or too much refunds to receive.

The replacement erases and revises the amounts for a certain tax (such as VAT). For this reason, it is required that you re-submit both the amounts that were inaccurate and those that were accurate, as well. All kinds of employer contributions are treated as representing just one single sub-type of taxes. For this reason, you must re-submit your withholding, health insurance and tax-at-source if any of these had contained errors or omissions.

Corrections must be made before 3 years have elapsed. For purposes of this time limit, the important factor is the calendar year or accounting period to which the tax relates that should have been filed and paid. The three-year period starts from the beginning of the calendar year that follows that year or accounting period.

Give the reason for the correction

Calculation error / entry error: Tick this reason as appropriate.

Change in legal praxis: Tick this as appropriate.

Guidance received during tax audit: Tick this as appropriate.

Error in interpretation of the law: Tick this if you had understood the rules incorrectly. This would be your reason for correction, for example, if you had first interpreted the law in one way and found out later that it must be interpreted in another way instead.

The Tax Administration imposes late-filing penalties for overdue returns

If you do not file a tax return by its deadline, or if you fail to make corrections to a filed tax return by the deadline date, you must pay a late-filing penalty. The penalty charges are specific for each sub-type of tax filed late. However, payroll withholding, the employer's health insurance contribution, and taxes at source are regarded as one single type.